The Fiscal Authority of South Korea has declared NFTs taxable. The South Korean Financial Services Commission (FSC) announced yesterday that it will begin taxing NFTs.
With this change, starting January next year, it will impose a 20% tax on income from virtual assets that exceed 2.5 million won ($2,102), according to The Korea Herald.
NFTs Coming to Tax
FSC Vice President Don Kyu-sang stated that NFTs are virtual assets under the current law on Designated Financial Transaction Information. Therefore, the government has the right to collect taxes from NFTs.
But FSC’s announcement is different from its previous statement. A report from the Financial Action Task Force (FATF) stated that “NFT or crypto collections are not considered virtual assets based on their characteristics.” In this guide, the FSC has publicly stated that it will not regulate NFTs.
The country’s Finance Minister, Hong Nam-ki, said the issue of whether NFTs are virtual assets is still in question.